Are you an entrepreneur or solopreneur thinking about outsourcing? Are you wondering where to look for trust-worthy people to outsource your work to, what are the outsourcing benefits and the strategies that help best optimise your efforts? Have a look at these 5 mini lessons to completely understand what is outsourcing and how to outsource.
Lesson 1- Outsourcing basics, what are the outsourcing benefits and strategies?
In this first lesson, we’re going to talk a little bit about what outsourcing is and how you can start using it to get more done. This way you can work smarter, instead of harder, allowing your business to grow much faster.
Outsourcing is the practice of hiring a person or business outside a company to perform services and create goods that are usually performed in-house by the company’s owner or employees.
I think this phrase “No Man is an Island” from poet John Donne translates well into business. As a business owner, there can be a tendency to feel as if we must do everything ourselves. We are the island.
Feeling like we are the only ones who can do the work the way it needs to be done is a tough cycle to break, especially if you care a lot about your business, but if you truly want your business to grow you must learn to let go and let other people complete the tasks that aren’t utilizing your time and abilities wisely. Then you can focus your efforts on the things you’re good at and will help you grow.
Hint: As you go through these lessons remember “You DO NOT have to do everything yourself!”
Now let’s start by going over some of the basics, so you can have a better understanding of how outsourcing works, the pros and cons, and how you can use it to your advantage
In the simplest terms, outsourcing is when a business delegates the completion of certain tasks to someone who isn’t under their employ. This individual is usually a self-employed independent contractor that either works from home or for a company who is subcontracted to complete the tasks. In exchange for the work, they receive compensation.
Many people assume outsourcing only applies to situations where large corporations have products manufactured overseas and don’t realize that the many outsourcing benefits can be reaped by any size business, even by solo entrepreneurs need part-time help.
In the online business industry, outscouring can be used for many things including content creation, social media management, video editing, web design etc. Despite its increasing popularity, there are still some who don’t clearly understand what it is and why they should use it because they don’t really understand its benefits, or they’re not sure how to outsource effectively.
There are two major types of outsourcing
- Domestic outsourcing: This is where both the business that needs work done and the independent contractor are in the same country. When you think about it, many of us use this type of outsourcing all the time. When we hire someone to do yard work, fix a leaky pipe or use a local college student to write a blog post or design a webpage.
- Overseas outsourcing: This is the type of outsourcing most people already understand. This is where large corporations, and even some smaller companies, employ manufacturing plants overseas to reduce costs on things like employee wages, materials, warehousing etc.
Now that you have a better understanding of what it is, you might be wondering why businesses would go to the trouble of outsourcing when they could keep things in the house.
The biggest benefit is that it can significantly reduce costs while increasing revenue. When you hire an independent worker as the employer you don’t have to provide benefits like health insurance, social security, Medicare or workman’s compensation, because technically they work for themselves. You’ll also have access to a larger workforce with the ability to scale up as your business grows.
It’s also useful for small businesses to hire independent workers when they need work done, rather than keep someone permanently on the payroll. You only pay them for the work they do.
As you dive more into outsourcing you’ll build working relationships with qualified people. Over time you will be able to put together a team of trusted people who can help you grow your business. This will open the door to more opportunities for you to pursue new work because you know you’ll be able to rely on your team to help you get things done.
Companies outsource primarily to cut costs. But today, it is not only about cutting cost but also about reaping the benefits of strategic outsourcing such as accessing skilled expertise, reducing overhead, flexible staffing, and increasing efficiency, reducing turnaround time and eventually generating more profit.
Lesson 2- What to Outsource
The best way to decide what you want to outsource is to take a close look at your daily activities. Make a list of the things you do, especially the ones that take you the longest and that you like doing the least. These are the things that you’ll want to consider hiring someone else to do for you first.
Once you’ve compiled this list, carefully consider which tasks can easily be completed by another person and which ones require your personal attention. This will give you a good idea of which activities you can outsource and which ones you shouldn’t.
Remember: You don’t have to do everything yourself for it to be done right! It can be hard because your business can feel like your child, but learning to trust others is a key trait of a good entrepreneur.
Make notes of the steps typically performed when completing them. This will help you create a process that can then be handed off to the person you hire. It will also help you decide whether they should be outsourced together, separately or remain in-house to maintain the highest level of productivity.
Next, review your list and note how long it takes you to perform each of the tasks. This information will be helpful later when you start searching for a candidate for the job.
1. Prioritise tasks
After you have carefully examined your daily activities, it’s time to prioritise them and create a comprehensive list in their order of importance. Include the tasks requiring your personal attention and the ones that can be outsourced.
When you’re ready to hire your first contractor, start with one of your low priority tasks first as a test. This will help you get more familiar with the process of outsourcing and determine whether it is a viable option. Don’t get discouraged if it doesn’t go smoothly at first. As with anything else in business, it often takes a few tries until you get the system down. As you become more comfortable with the process you can continue down your list.
Find out more about the tips on how to be more productivity as an entrepreneur here.
2. Administrative tasks
We have already discussed the importance of evaluating your own daily tasks, but it’s also important to consider tasks completed by your staff members if you have them. Administrative tasks such as content creation, data entry, editing, proofreading, transcription and others are a great place to start because they can usually be outsourced in order to increase efficiency.
3. A plan
Lastly, develop a plan for managing your outsourced activities. Before you begin hiring multiple freelancers to complete tasks, you should develop a plan for managing them.
This plan should include the following:
- A method for selecting candidates
- A method for training the people you hire
- A method for evaluating the work they do
Once you have a plan in place you’ll want to start looking for people to hire. A good place to start is on online job sites.
Here are a few places you can begin your search:
- UpWork – This is one of the world’s largest online workplace hubs. You can post your job listing on the site and professional freelancers can apply to complete it for you.
- Freelancer – This is another very popular workplace hub where you can post your job listings and freelancers can apply to complete it for you.
- Onlinejobs.ph – This is one of my favourites because it’s very affordable. It’s one of the largest online marketplaces for Filipino virtual assistants and employees.
Of course, there are many more like Guru.com, PeoplePerHour and Truelancer. The one you choose will depend mostly on your needs and personal preferences. When you are just getting started look for a site that provides training. For example, Onlinejobs.ph has an employer FAQ page and also sends out tutorials that will help you learn how to post jobs as well as hire and manage independent workers.
On each of these sites you will find various job categories. When you have a particular requirement, all you do is post your project in the relevant category and people who are interested will apply.
While each site is different the concept is the same, and because the people who apply are genuinely looking for work you can be sure that you will receive plenty of capable applicants to choose from.
Lesson 3- How to Outsource
When it comes to outsourcing the first few times can be a little overwhelming. The thought of relying on someone else to perform tasks usually completed by yourself or someone in the house can be stressful, to say the least.
One way to help the process go a little bit smoother is to set a certain criterion for selecting qualified candidates. Start by making a list of what you expect from the person you hire. Do you want them to have certain skills, level of education, years of experience etc.
Knowing what you want before you start posting jobs and sifting through applicants will help you eliminate unqualified candidates quickly, so you can focus on choosing from the ones who can complete the tasks you assign to them.
To find the right candidate for the job, post a description outlining the project requirements. The more details you can provide the better. This will help you attract qualified candidates who will be motivated to do a good job and complete the task assigned in a timely manner.
Immediately disregard those who aren’t qualified for the position. Then review the applications of qualified candidates carefully and select a small group of the most promising ones. Next interview each of them, if applicable, verify their references and past work experiences to learn more about them, their abilities and work ethics.
After interviewing the final list of candidates, it’s time to decide which one to hire for the job. Don’t be discouraged if none of them seem right for the project you’re outsourcing. You are under no obligation to hire any of them. If you have time you can continue your search by posting the job again to look for new applicants.
When outsourcing, it’s important to clearly define the project parameters. This is critical because it helps the contractor fully understand the tasks they’re being hired to complete. Providing them with detailed instructions will help you avoid unnecessary frustration and will help them fulfill their contractual obligations in a timely and satisfactory manner.
Failure to establish fixed project parameters and goals can lead to complications when outsourcing any type of project. For instance, the contractor may feel as though they have completed the project as it was outlined but the employer may disagree. When this happens there can be costly delays until the issues are resolved. If you’re unable to come to an agreement it might be necessary to employ a mediator to evaluate the contract documents and the work produced to determine if the terms were met.
Establish a firm deadline
Another important aspect of outsourcing is establishing a firm deadline for the project. This is the best way to avoid misunderstandings and to prevent missed deadlines. Setting milestone goals is also a very good idea because it gives you, the employer the chance to evaluate the progress of the contractor during different stages of the project and to ensure its proceeding according to schedule.
Ideally the deadline should be established before the candidate is chosen because it will help you to verify that the contractor is available for the duration of the project. As a matter of fact, scheduling should be discussed early in the hiring process to avoid selecting an ideal candidate only to find out they are unavailable when their services are required.
If you decide to go through an online jobsite, as we discussed in the last lesson they will often provide tools and resources for communicating, updating and paying the people you hire. It will also provide you with a certain level of security and culpability just in case an issue arises.
As you plan your projects keep these guidelines in mind and it will help make the process much easier for you and for the person you decide to hire.
Lesson 4- Outsourcing Pros and Cons
Up until now we’ve talked a lot about the upside of outsourcing, but it’s important to keep in mind that there can be downsides too. You should always be careful whenever you hire outside people for your projects. This holds true even when you work with a temp agency or company like Freelancer, Upwork or Guru.com
While convenient, these places have a high turnover rate and you need to be prepared to change freelancers frequently. When this happens, it may not seem like a big deal, but it can end up costing your business a lot more than the extra time it takes to train new hires.
Generally, it takes approximately two weeks for a new contractor to get settled in and accustomed to completing task the way you want them done. This can slow down several different aspects of your business including sales, so it’s important to have a plan in place for training new people.
A good place to start is by communicating with them on a regular basis. It lets them know that you’re committed to making the project work for both of you. Make sure that they are all set up and ready to go.
This can start with the simplest things like making sure they have a detailed description of the task, the necessary file drop procedures, software programs, a reliable email account, usernames, passwords, etc. Don’t wait until the day the project is supposed to start and then rush around trying to get them everything they need to complete it.
Make sure that you provide your new hire with all the information they need to do a good job for you. Be supportive and available for questions. Help them throughout the initial phase of the project. This will benefit you both and help keep the job moving forward as scheduled.
Checklists are a great way to help new freelancers stay on task and avoid unwanted confusion. Almost every process can be reduced to a series of steps that will ensure task completion without constant supervision. Think of them like a safety net for you when you don’t have enough time to constantly manage the projects you’ve outsourced.
4. Make training videos
It’s not hard to create screen capture videos. Most computers come with pre-installed software that makes it easy to do. This is a great way to put complicated steps into a visual permanent record, so new hires just have to watch the videos to learn your preferred process for completing common tasks.
5. Project management
As you begin to hire additional people to complete the tasks you plan to outsource it can become unmanageable very quickly if you don’t plan out a project management strategy. This can be as simple as setting up a spreadsheet or using Google calendars to keep track of the people you hire and their assigned tasks.
There are also online tools that can help you manage your projects and team members in real time. These are a great option, because they allow you to add and remove people, assign tasks, share files and more.
Here are a three you may want to check out:
- Basecamp – It’s one of the most popular project management apps on the market and it has a variety of features that can help you keep track of all your projects.
- Trello – Its interface is built on a system of boards, which contain various lists and cards that can be dragged and dropped for a customizable screen. It’s very similar to social media platforms like Pinterest. You can check it out here!
- Asana – Is perfect for breaking large objectives down into bite-size chunks. It’s a web-based project management software tool that gives each team member a workspace where tasks can be assigned with specific deadlines, so that everyone knows what they should be working on. You can check it out here!
It’s important to remember that the decision to outsource doesn’t end with hiring. In fact, it’s only the first step. After you hire you must be willing to spend a little time training your new worker, so it only stands to reason that you should make the process as easy as possible for both of you.
Lesson 5- Outsourcing Strategies
As a business owner, chances are you have very high expectations for yourself and the people you work with. However, it’s important to understand that not everyone will be able to live up to those expectations, no matter how hard they try. Now, in no way am I saying you should settle for subpar work.
I’m just letting you know that like anything else in business it takes time to find the right balance. Especially when it comes to hiring qualified people and developing good working relationships with them.
One big mistake that many new businesses make is hiring too many freelancers at once. Having a team of people all working to grow your business for you can be very exciting in theory, but it can also lead to disaster fast, if you don’t have a solid plan for managing your projects as we discussed in the last lesson.
You should always go into any new project with a clear objective in mind before you begin hiring, so you’ll know exactly how many people you’ll need for the job, what tasks they will be responsible for and how long they have to complete them.
1. Don’t rush the process
Another big mistake I’ve seen is rushing the hiring process. It’s essential to take your time when hiring someone new. Look for people with great references and excellent skills. Check out what their previous clients have to say and look over their portfolio. Just because they have a four-star rating doesn’t mean that they are a perfect fit for your project. Take time to interview them, over the phone or in a video chat if possible, so you can get a good feel for their work ethic.
2. Pad your time
As we went over in lesson three, it’s important to give the person you hire plenty of time to complete the project. But you can’t always account for mishaps and missed deadlines, so for your own peace of mind it’s a good idea to factor in a little extra time in your schedule. Kind of like a bumper pad.
For example, if you need the project done in seven days, tell them there is a firm five-day deadline. This way, if they are late, or if you have to edit or send the work back for revisions you’ll still be able to complete the project on time.
When you hire someone new let them know that if they do a good job, there is the opportunity for more (steady) work. When they do a great job for you let them know you appreciate them. Offer bonuses, rewards, tips, and raises to people that produce outstanding work. Nothing motivates more than a nice bump in pay.
When you are working with someone new providing constructive feedback is very important. Keep in mind that they want to do a good job for you because their income depends on it. Let them know what they are doing right and where there is room for improvement. The better you can convey exactly how you want the work to be completed the more they will strive to meet your expectations.
If you want the person you hire to be reliable and produce quality work, you must do your part and be reliable too. This holds true in terms of project communication as well as prompt payment. After all, you wouldn’t enjoy working for someone who doesn’t provide clear instructions. Let alone someone who doesn’t pay on time.
The longer they have to wait to get paid the less likely they will be to produce quality work for you in the future. When you’re reliable and pay on time, they will be happy, and they will be much more eager to do a good job for you.
Lastly, when you come across someone that meets all your expectations, hold on to them. Treat them like a rockstar! Because in the world of outsourcing they are and they can help you grow your business faster than you can do it alone!
As an entrepreneur, it can be difficult to let go. After all, your business is just like your baby and it can be scary to let other people handle it. However, it is important for you to let others that are good at what they do take over, so you can have more time and energy, working on things that you excel in and are passionate about.